Winning a money judgment against another party can feel like winning the lottery. That is, at least, until you understand how difficult collection could be. Your attorney recommends that you agree to a payment plan and put it all behind you. Why would he offer such advice? More importantly, should you heed it?

Whether or not you follow your attorney’s suggestion is entirely up to you. Your circumstances will dictate your choice. As for why your attorney might suggest a payment plan, it boils down to this: setting up a payment plan is the easiest and most effective way to guarantee payment. It also allows the judgment creditor to move on to more important things.

The Root of the Advice

Accepting a payment plan might have been the furthest thing from your mind when you first considered suing the other party. But now that it has been offered, you have a choice to make. The root of your attorney’s suggestion is this: the person you sued does not have enough cash to pay you in full. In fact, he is not likely to have that kind of cash for quite some time.

In the absence of said cash, you have a few options other than accepting a payment plan:

  • Garnishing wages and bank accounts.
  • Placing liens on personal property.
  • Seeking writs of execution to seize and sell property.

Most states give you the legal authority to pursue all these options. And there are still others I have not mentioned. But it is worth thinking long and hard about each one before proceeding. There are advantages to aggressively pressing ahead. But there are also disadvantages.

Cooperative Debtors Are Easier to Work With

Judgment Collectors is a Salt Lake City, Utah agency that specializes in collecting judgments. They operate in nearly a dozen states. One of the big reasons they promote payment plans is to ensure that debtors remain cooperative. It is pretty simple. Cooperative debtors are easier to work with.

Setting aside a payment plan and immediately going after wages or property only serves to antagonize a debtor. Doing so runs the risk of losing the debtor’s cooperation. At that point, the debtor may try to hide his assets. He may quit his job or even leave town to avoid paying. Now your collection efforts are made much more difficult.

Granted, agreeing to a payment plan could mean receiving payments for years. But it also means getting every dime you are owed, plus interest. Taking any of the other actions could ultimately leave you getting less. You need to account for that risk.

Agreeing to a Settlement

There are legitimate reasons to not agree to a payment plan. At the top of the list is a genuine need for immediate payment. Maybe you are a small business owner and you need the cash to pay your own bills. Yet you have another option: agreeing to a settlement.

A settlement is a court-approved agreement outlining the details of what is normally a lump sum payment. In almost every case, the judgment creditor agrees to accept a lesser amount in exchange for a cash payment. The debtor agrees to pay it in short order.

Needless to say, there are plenty of ways to enforce a money judgment. But the best way to go in most cases is to work out a payment plan. It is easy, fast, unintimidating, and usually guarantees full payment over time. More aggressive collection efforts might result in faster money, but they might also cost you more than what you gain. Are they worth it?